Cerberus are in big trouble!

Cerberus Capital Management has been swamped with redemption requests with the Wall Street Journal reporting that investors are asking to pull out $5.5 billion or 71 percent of assets from its hedge funds.

Cerberus last month tried to entice investors into staying with the firm, but found that its clients overwhelmingly wanted to leave, the newspaper reported.

…

Last year, when the average hedge fund lost 19 percent, Partners lost 24.5 percent on investments.

I am not sure how this is going to effect the other assets owned by Cerberus. According to Wikipedia Cerberus have $24 billion in assets.

Among their assets is the Freedom Group which owns Remington, Bushmaster, Marlin and other gun manufacturers.

Founder and Dictator-In-Chief of TFB. A passionate gun owner, a shooting enthusiast and totally tacti-uncool. Favorite first date location: any gun range. Steve can be contacted here.

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jdun1911

Like I said in the other post, I was surprise to found out that Cerberus was alive. I figure when Obama stole over 8 billion assets from Cerberus and gave it to the Union, they would have to liquidate their remaining assets immediately. They hold out as long as they could. Give them credit for that.

Obama will reap what he sow. No one will invest in the USA because of what he did to Cerberus. He made our country into a banana republic.

Matt Groom

You see? This is what I feared. Cerberus will go out of business or have political pressure exerted on it by the Marxist-in-Chief and all of those firearms companies will be vulnerable to being sold to whomever or being closed entirely and their assets sold off to feed the beast. Massive consolidation of so many major firms couldn’t possibly be a good thing in the long run for either the consumer or the companies themselves.

Just look at how Cerberus is already screwing with the products the companies can produce:
Magpul develops Masada
Bushmaster buys Masada, calls it the ACR
Cerberus buys Bushmaster
Bushmaster is forced to hand the ACR to Remington
Remington has yet to sell the ACR

It is worrying. Competition is always good for the consumer. We now have Marlin, Remington, DPMS and Bushmaster and a few others not competing with each other.

It is a good thing Ruger and S&W are public companies.

solomon

Wait we had a monopoly in the making…now with Cerberus about to go under they must divest themselves of these companies. Either they’re sold or they revert back to individual holdings. Competition is back. The worst that would happen is that they’re dissolved but that just means other smaller companies will fill the void. Free market sorts itself out in the end.

Michael Hutchcraft

I ran across an amazing story on the internet written by patriots and it really opened my eyes to what is coming. “Battle of Jakes” Read and learn!

chris

1. My prediction:
As non of the group are large military contract holders eg:Colt, FN, Obama will call in his markers on Cerberus and the “Freedom Group” will be closed down.

jdun1911

Matt,

Cerberus didn’t screw up the ACR. Magpul was well aware that Bushmaster will enter the ACR in the next military small arms competition.

I’m not sure how the contract was done and in what way. Magpul might have sold the ACR design out right to Bushmaster like they did with the M93B stock to Falcon, the maker of ergo grip. What probably happen, Magpul sold the ACR out right but retain royalties and technical support to Bushmaster, which is common in the gun industry. What I think they should have done was sold the military rights to Bushmaster and kept the civilian sell rights to themselves.

Chris,

Cerberus can spin off Freedom Group into their own company. Or Cerberus can sell each companies individually. I wouldn’t lose sleep over the out come of Freedom Group even if meant closing all the companies down. There will always be someone to their places as long as their are money to be made.

Matt Groom

jdun1911,

I do believe that it was this blog where the information was posted that the Bushmaster ACR was now going to be handled by Remington for military sales. Commercial sales, I don’t know, but it seems unlikely and wholly illogical that the rifle would be built by two entirely different companies, even if those companies are owned by the same entity. Since the Masada was announced at SHOT show 2007, and we’re halfway through 2009, it seems unlikely that the ACR will be in production by Christmas, which means another SHOT show will come and go and there will still be no Masada/ACR to be had for any price.

If Cerberus can force one of these companies to hand over a highly anticpated product to another company, they can force other projects to be shelved entirely as a matter of political expedience, or force them to include “smart gun” technologies, etc. It was easy to boycott S&W when they cooperated with the Clintonians, but how easy would it be to boycott Remington, Bushmaster, DPMS, Marlin, H&R, Dakota Arms, and NEF? What used to be a decision made by 7 companies is now made by one, and no matter how you look at it, that’s bad for the consumer.

If Cerberus didn’t screw with the ACR, and it’s still not in production, that means the design isn’t worth a damn and will never be as good as existing designs, and all evidence points to the contrary.

To me I will not lose any sleep over the ACR. It bring nothing new to the table. If it comes out I might get it for my collection. If not so be it. With that said the ACR is an improve version of the HK G36/XM8 IMO.

I don’t see why people can’t boycott freedom group or any companies. They are not a monopoly and the products the group produces have heavy competitions. Anyway the guy running Cerberus is an ex 82nd Airborn, libertarian, and pro gun rights.

Steve,

Yeah it looks like that way.

Matt Groom

Magpul knew that they were selling a product to Bushmaster for a great deal of money. It was a 90% complete product that Bushmaster merely had to tool up for and produce. What Bushmaster probably wasn’t aware of was that their new corporate masters were going to hand their golden goose to a company that hasn’t built a reliable military grade semi-automatic since they stopped producing M1911s at the end of WWII.

I haven’t said anything bad about Magpul and I like a lot of their products myself. Most of the employees I’ve met from Magpul are all stand up guys, and I’m not sure why you feel you need to come to their defense. My gripe is with Cerberus, and if the ACR isn’t the wonder weapon everyone imagines it will be, it’s probably still better than all of these silly Piston Driven AR conversions which keep coming out.

The guy running Cerberus is named Steve Feinberg, and after a cursory search, the only data I can find about any possible military service he may have had only includes a brief stint in the ROTC in college. He seems to be a big contributor to the Republican party and has ties to Dan Quayle and Donald Rumsfield, both of whom I admire, but I don’t see any evidence to support your claims that he’s even the slightest bit Libertarian, anymore than anyone else that isn’t a Marxist.

The purpose of an investment firm is to make money. If making money means doing what is most politically expedient, then they will do it. If the government says they want to have the exclusive rights to the ACR for 15 years and no sales may be made to the public in that time, a wise and savvy company will say “Okay. No problem.” and the rifle won’t be sold to civilians until it’s practically obsolete. That’s not politics, it’s business.

jdun1911

He is a former 82nd Airbone and in college he wrote his libertarian thesis. He is 100% pro gun and a life time member of the NRA IIRC. The last time I heard he was trying to get elected to the NRA board.

All I am saying is when Magpul sold the rights to Bushmaster they knew what they were getting into. They knew Bushmaster was going to enter the ACR into the new military small arms competition in November of this year. They knew it will be delay and might not even enter civilians sales. Magpul knew everything in advance before the deal was closed. Don’t blame Bushmaster or Cerberus.

I see nothing wrong with the military having exclusive rights. Nothing at all. The company can either take the deal or leave it. I have no problem companies making money as long as it is legal. It is purely a business decision.

Honestly there are more things gun owners should be worry about then the ACR. Like unemployment (over 16% real unemployment number and climbing) and the lack of ammo. I’m stack up in ammo except of .22lr but I know a lot of people that can’t get any including reloading supplies. When the SHTF it doesn’t matter what nice firearms you have if you don’t have the ammo to load it.

Trust me the SHTF really soon. Almost 2 millions Americans will run out of their unemployment check at the end of this September. Over 3 millions will be out by the end of the year. A lot of Americans will be homeless and without food. That’s what gun owners should be worry about. and it just starting.

I didn’t pay much attention to Cerberus, so I was surprised when they were mentioned in this context – I didn’t know they were tied to Freedom Group.

If I were following the firearms industry I would have been trying to get them to separate from Cerberus, as they pretty much trash everything on the general consumer side. Not just Chrysler and GMAC, but they acquired Mervyn’s (California retail dept store chain) and then ran it into the dirt and then some. All their stores closed last year.

Eric

I ran across this thread and am a bit disappointed by the comments. You need to look at the big picture, see what is going on across the economy, and refrain from attempting to add 2 plus 2 to equal 3. I would like to offer a few comments to alleviate some misconceptions.

Cerberus did in fact take a beating due to their affiliation with Chrysler. All of the big auto makers are in trouble.

There is absolutely no indication that the Obama administration has targeted Cerberus due to their ownership of the Freedom Group.

The Masada aka ACR is what made Magpul. They made their bones on that gun and ultimately it doesn’t matter if it is never put into production. In fact, it may be in their best interest for it to never happen just in case it turns out to be a lemon.

Magpul sold Bushmaster an immature design. A great deal of time, money, and other resources have been put against the problem to make it mass production ready. In the deal, Bushmaster will sell commerical variants, Remington will handle Mil and Gov sales and Magpul will build all of the plastic pieces.

Matt Groom

Eric,

The Obama administration targeted Cerberus because they are Capitalist and the administration is Marxist. “Tax the rich” has been the unofficial motto of one particular political party since 1913. If they make guns, they’re a target of the Left.

The Magpul is what made Magpul, not the Masada. If anything could be considered a greater money maker for that company than the P-Mag, I haven’t heard of it. The very idea that they’ve made more money with the Masada sale than they did with the P-Mag, the Magpul itself, or any of their stocks and accessories is a bit out there.

As I remember it, didn’t Chrysler more or less blackmail the government into giving them bailout money. They threatened to shut down production if money was not given.

I have no sympathy for the consequences of taking tax payers money to fund a business that should have died years ago.

Matt Groom

They did exactly as I would have done in their place. The government should have done the constitutional thing and said “Gee, maybe we shouldn’t be giving taxpayer money to companies which have been mismanaged to the point of bankruptcy.” If you find a duffel bag full of money on the side of the road, you keep it.